That means that the path the EU has chosen for protecting the provision of cross-border services now seems to have also been adopted, emphatically, by the Netherlands. In our opinion, this is entirely justified, as we recently wrote in the Tijdschrift voor Arbeidsrechtpraktijk (TAP) [Journal of Employment Law] in an article on the exception for “cross-border service provision” under the (Dutch) Aliens Employment Act [Wet arbeid vreemdelingen, Wav] in the light of EU case law and the way Dutch case law dealt with this matter up to that point (TAP 2016/323).

In our article, we said that we had noticed that where market mechanisms led to Dutch companies wishing to make use of foreign service providers and subcontractors, the Ministry of Social Affairs finds itself faced with companies that “abuse” the right of free movement of services to circumvent the work permit obligation. The rigorous rulings by the Administrative Jurisdiction Division to position that category within the Wav definitions and subject to the work permit obligation resulted in even businesses that legitimately use cross-border service providers being faced with extremely high fines under administrative law.

Where work by foreign nationals was concerned, we thought that there always seemed to be a game of ping-pong going on between the CJEU and the Administrative Jurisdiction Division. It was difficult to identify a particular line, given the small number of EU rulings, which were also dispersed between the Member States. In our view, the CJEU seemed to be adopting a rather more limited approach to European foreign employment than were the Dutch courts so far. It could not be denied, however, that in recent years the Administrative Jurisdiction Division and the courts displayed a more critical attitude regarding the application of the Wav by the Minister.

We concluded our article by noting that we were curious as to what the Division was going to do about the Wav issue of “cross-border service provision” in 2017, given that the CJEU had attempted in two recent rulings to distinguish between pure cross-border provision – on which Member States cannot impose restrictions – and false cross-border provision of services/labour, which they can restrict during a transitional period.
Our hope was that the more constraining Wav trend within the Administrative Jurisdiction Division would also continue as regarded the exception for cross-border service provision, so as to bring it more in line with the view of the CJEU. This week’s ruling has made this a reality.

You can read the ruling by the Administrative Jurisdiction Division of the Council of State here.